Payment solutions for the travel industry – roundtable review

EQ Global recently partnered with Travolution to host a roundtable; discussing how payments in the travel sector can both improve the customer journey and help meet business objectives.

The roundtable was well represented from multiple areas of the travel industry, including tour operators, travel agents, cruise lines and car hire.

A hot topic of discussion was the impact of PSD2, and the removal of card fees, on businesses throughout the industry. Businesses are left looking for solutions to recover, or avoid, the losses from card fees. A general consensus was the push to move from debit/credit card payments over to the cheaper-to-process bank transfers or direct debits. However, in order to effectively encourage customers to make transfers, a mindset change is required, especially in the UK where card payments are so popular.

Some businesses have looked at removing the more expensive payment methods to process (e.g. AMEX) in order to save on fees. However, customers want to pay using whichever method of payment they prefer, and are willing to shop elsewhere in order to use preferred payment methods. These businesses quickly identify that absorbing the card fees on a sale is better than no sales at all. The consensus was that card transactions would not go away overnight, so reviews of other areas are needed to fill the gap.

Another area of concern was managing the process of sending and receiving multiple currencies. Customers want to pay in their local currency and over a settlement period that is manageable. The process of linking this to the supplier currency was agreed to be a long winded and often costly process, with examples provided of profit margins being completely eroded. An alternative process that would automate the risk management strategy and prevent profit margin loss would be favored by all parties involved.

The topic of manual processes, and the impact on the business, is true for payment processing as well as risk mitigating. Processing large numbers of payments and having to manually deal with a large network of payment providers can lead to manual errors and makes up a large part of a business’ finance and operations team. By making the system automated this risk is removed, however there was an agreement that there is a big gap between current and future state.